Kerala Allocates Additional Rs 100 Crore Subsidy for Rice Farmers Amid Pending Union Dues

Thiruvananthapuram: Kerala Finance Minister K.N. Balagopal announced that the state government has sanctioned an additional Rs. 100 crore as a subsidy for paddy procured from farmers during the months of March and April. The amount was released through the Kerala State Civil Supplies Corporation, the agency responsible for paddy procurement in the state.

This latest allocation brings the total subsidy disbursed so far in the 2024–25 financial year to Rs. 285 crore. The state budget had earmarked Rs. 606 crore for paddy procurement subsidies this year. Earlier, Rs. 185 crore was released for paddy procured until February.

Kerala continues to provide this support even as the Union government has not cleared significant dues under the Minimum Support Price (MSP) scheme and transport cost reimbursements. According to state officials, around Rs. 1,100 crore remains pending from the union government— a backlog that includes unpaid dues dating back to 2017.

Despite these delays, the state has ensured that paddy farmers are paid promptly. Kerala's procurement model stands out nationally for offering immediate payments — well before receiving any union share — and for enhancing MSP with state-funded subsidies.

Paddy (unhusked rice) remains a crucial crop for thousands of farmers across Kerala, especially in regions like Kuttanad, Palakkad, Alappuzha, Thrissur, and parts of Pathanamthitta, Malappuram and Wayanad. However, Kerala's total rice production has declined over the decades due to urbanisation, rising input costs, and fragmented land holdings.

As of recent estimates, Kerala produces about 5–6 lakh tonnes of rice annually, which covers only a fraction of its domestic consumption needs. The government’s procurement efforts are aimed at supporting the remaining paddy-growing farmers and preserving food security.

To incentive cultivation and prevent further drop in acreage, the state not only offers higher procurement prices but also supports farmers through production bonuses and innovative schemes.

Kerala’s Paddy Receipt Sheet (PRS) loan scheme allows farmers to receive the full value of their procured paddy through banks immediately after procurement. The state government takes on the responsibility of repaying both the principal and interest of these loans, ensuring that farmers bear no debt burden.

In addition to the PRS support, the government also pays a production bonus directly to farmers, further enhancing their income. These mechanisms have helped ensure that Kerala’s rice farmers receive among the highest effective prices for their produce in the country.

While most Indian states wait for the union government to release MSP and support funds before paying farmers, Kerala’s proactive model offers a clear contrast. Maintaining timely payments and offering price certainty are essential to encouraging continued paddy cultivation in a state that has seen declining rice acreage over the decades.